340:10-3-31 Earned income

(a) The term earned income refers to monies earned by an individual through the receipt of wages, salary, commission, or profit from activities in which the individual is engaged as self-employed or as an employee. A person is self-employed when: (1) he or she declares self-employed status; (2) he or she works as a sole proprietor or an independent contractor; (3) he or she is in business for oneself, including a part-time business or gig work; (4) he or she earns self-employment income from a partnership according to United States Internal Revenue Services tax forms; (5) there is an employer and employee relationship and the employer does not withhold income taxes or Federal Insurance Contributions Act, even if required by law to do so; or (6) the employer withholds taxes and the person provides proof he or she files taxes as self-employed. (b) Payments made for accumulated annual leave, vacation leave, sick leave, or as severance pay are earned income whether paid during employment or at termination of employment. Temporary disability insurance payment(s) and temporary worker's compensation payments are earned income if payments are employer funded and the individual remains employed. (c) Earned income received as a one-time nonrecurring payment is a lump sum payment per Oklahoma Administrative Code 340:10-3-28. (d) Earned income includes in-kind benefits received by an employee from an employer in lieu of wages or in conjunction with wages. An exchange of labor or services, for example, barter, is an in-kind benefit. Such benefits received in-kind are earned income only when the employee and employer relationship has been established. (1) The cash value of the in-kind benefits must be verified by the employer. (2) Income from self-employment also includes in-kind benefits for a work activity or service for which the self-employed person ordinarily receives payment in the business enterprise. (3) Medical insurance secured through the employer, whether purchased or as a benefit, is not in-kind income. (e) Gross earned income is used to determine eligibility for assistance. Gross earned income is defined as the "true wage" prior to payroll deductions and withholdings. Income that is based on the number of hours worked as opposed to income based on regular monthly wages must be computed as irregular income. (f) Countable earned income excludes income from: (1) capital investments with respect to which the individual is not actively engaged. Dividends and interest on rental properties in the hands of a rental agent with the check forwarded to the recipient is excluded from "earned income;" and (2) benefits not in the nature of wages, salary, or profit accruing as compensation or reward for services, or as compensation for lack of employment. (g) Eligibility staff verifies income by the best available information such as pay stubs presented by the individual or an interview with the employer. Eligibility staff verifies medical insurance which may be available to the employed Temporary Assistance for Needy Families recipient and any dependents at the same time that income is verified. (1) Pay stubs may only be used for verification if they have the individual's name or social security number indicating that the pay stubs are in fact the individual's wages. The stubs must include the date(s) of the pay period and the amount of income before deductions. If this information is not included, employer verification is required. (2) With new employment, it is necessary to verify the beginning date. (3) When a member of the assistance unit accepts employment and has not received any wages, verification of the amount of income to be considered and the anticipated date of receipt must be obtained from the employer. (4) Verified income expected to be received during a future month available to the assistance unit and is counted in determining eligibility for that month.